How can I access the question sets?

To access the question sets, you first need to sign up for a free PrepLounge account. With a free membership, you can view a selection of questions and try out the first sets.

Why are question sets important for my preparation?

The question sets bring together the most common topics asked in Investment Banking , Corporate Finance , and Private Equity interviews. This allows you to focus your practice on the areas interviewers test most frequently. They help you strengthen your fundamentals, internalize typical ways of thinking, and become more confident in delivering clear and structured answers.

How do the question sets differ from traditional case studies?

Case studies usually simulate complete business problems, while the question sets focus on highly targeted technical interview questions. They are shorter, more structured, and designed to test your technical knowledge efficiently. This makes them particularly useful for preparing for the technical rounds of finance interviews.

How can I best practice the question sets?

You can start by working through the question sets on your own to get an initial feel for the structure and logic of the questions. Afterwards, it’s best to practice them in a real interview environment with other members, you’ll find new invitations on the Meeting Board every day. If nothing suitable is available, you can use the Candidate Listing or post your own invitation. To take your preparation to the next level, you can also schedule coaching sessions with our experienced coaches who have helped many candidates secure their dream job offer. Our tip: Review the Finance Interview Basics beforehand to build a stronger foundation and deepen your overall understanding.

What is the difference between Beginner, Intermediate, and Advanced?

The difficulty levels help you gauge how deep the questions in each set go. Beginner sets cover foundational topics such as simple definitions or basic calculations, while intermediate and advanced sets focus on more complex concepts, modeling logic, and connections between financial metrics. This allows you to tailor your preparation to your current skill level.

How do I know if I answered a set correctly?

Each question in the set includes a dropdown with the complete solution path or a model answer. This allows you to check whether your reasoning, structure, and explanation align with what interviewers typically expect. However, we recommend not opening the solution too quickly – give yourself time to think and work through the question on your own first.

Are the question sets modeled after real finance interviews?

Yes, the sets are based on the types of technical questions typically asked in Investment Banking, Private Equity, Corporate Finance, and Audit interviews. They cover both theoretical concepts and short mini-cases that closely mirror real interview situations. The goal is to prepare you for the question style, depth, and expectations of actual interviewers.

What does the star rating under each set mean?

The star rating reflects how other users have evaluated the question set – including its quality, difficulty, and overall usefulness. It helps you gauge how challenging or helpful a set is compared to others on the platform. The higher the rating, the more valuable past candidates found it for their interview preparation.

Back to overview

Case by

PrepLounge

Intermediate Accounting Interview Questions for Finance

More information

Difficulty: Intermediate

Interviewer-led

5.0

< 100 Ratings

Times solved: 300+

Audit

This set of questions is designed to help you master the core concepts around the three financial statements. The difficulty ranges from beginner to advanced, progressing from foundational questions to a multi-step scenario that tests your understanding of capital expenditures, debt financing, depreciation, interest, and asset write-downs.

In total, walking through this set in an interview would take approximately 20 minutes, making up around 40% of a typical 45-minute interview. Below, you’ll find model answers for each question, including tips for the interviewer on what to look for in candidate answers.

Practice makes the difference

Practicing alone helps – with a partner it’s even better. Solve this question set in a realistic mock interview.

Walk me through the three financial statements.

Show solution Hide solution

How do the three financial statements link together?

Show solution Hide solution

The three financial statements are closely linked, and changes in one often flow through to the others. Here's how they connect:

Net Income from the bottom of the Income Statement flows into the top of the Cash Flow Statement as the starting point for cash from operations.
On the Cash Flow Statement, we then add back non-cash expenses like depreciation and amortization from the Income Statement, and we adjust for non-operating items like gains or losses on asset sales by flipping their signs.
Next, we adjust for changes in operating assets and liabilities (working capital) from the Balance Sheet. The rule of thumb is:
- If an asset increases, cash flow decreases
- If a liability increases, cash flow increases, and vice versa.
In Cash Flow from Investing, we account for capital expenditures (like purchases of PP&E) and investment activities (buying or selling marketable securities).
Cash Flow from Financing includes debt and equity transactions, such as issuing or repurchasing stock, raising or repaying debt, and paying dividends.
The net change in cash from all three sections of the Cash Flow Statement is then used to update the cash balance on the Balance Sheet for the next period.
Finally, the Balance Sheet is updated to reflect changes in cash, debt, equity, PP&E, and other items that were adjusted on the Cash Flow Statement.

This linkage ensures that the three statements form a self-reinforcing system that reflects both the company’s performance and how that performance impacts its financial position and liquidity.

Note for Interviewer

The most important aspects to focus on in the answer are:

Net Income Flow: The candidate should clearly explain that Net Income from the Income Statement is the starting point for the Cash Flow Statement.
Cash Impact on the Balance Sheet: The candidate should explain how the cash calculated in the Cash Flow Statement is reflected on the Balance Sheet as changes to the cash balance.
Non-Cash Adjustments: The candidate should mention non-cash items like depreciation and how changes in working capital (e.g., accounts receivable, accounts payable) affect all three statements.

If you had only one financial statement...

If you could only look at one financial statement to assess a company’s performance and financial health, which one would you choose and what makes it the most informative?

Show solution Hide solution

And if you had two financial statements...

And if you had two financial statements to assess a company’s performance and financial health, which one would you choose and why?

Show solution Hide solution

Beginner Single Step Scenario

Suppose a company records $25k more in depreciation expense this quarter. How does that flow through the Income Statement, Cash Flow Statement, and Balance Sheet?

Show additional information Hide additional information

Show solution Hide solution

Let’s walk through how a $25,000 increase in depreciation expense affects all three financial statements:

Effects on the Income Statement

Depreciation is recorded as an expense, so it reduces Operating Income (EBIT) by $25,000.
That lower operating income leads to a lower pre-tax income.
With a 20% tax rate, the company saves $5,000 in taxes. This is often called a tax shield.
So overall, Net Income decreases by $20,000 (–$25,000 in EBIT + $5,000 in tax savings).

Key takeaway: Depreciation reduces profits, but also reduces the tax bill.

Effects on the Cash Flow Statement

The Net Income at the top goes down by $20,000, reflecting the lower profit.
But depreciation is a non-cash expense, meaning the company didn’t actually spend that $25,000 in cash. It’s just an accounting adjustment, so, depreciation gets added back, which increases cash flow by $25,000.
Overall, the Cash Flow from Operations increases by $5,000 (–$20,000 Net Income + $25,000 add-back).

Key takeaway: Even though net income went down, cash actually went up because depreciation is non-cash.

Effects on the Balance Sheet

On the Assets side:

Cash increases by $5,000, from the Cash Flow Statement.
Property, Plant & Equipment (PPE) decreases by $25,000, because of the added depreciation.
So, total assets decrease by $20,000.

On the Liabilities & Equity side:

There’s no change to liabilities.
Shareholders’ Equity (specifically retained earnings) goes down by $20,000, due to the lower net income.
That matches the change in assets, so the Balance Sheet remains balanced.

Key takeaway: Lower net income reduces equity, and lower PPE + higher cash affects total assets, but both sides still match.

Note for Interviewer

Focus on these top three points to evaluate the answer:

Income Statement: The candidate should clearly explain that depreciation reduces operating income and pre-tax income, with a tax shield reducing the overall impact on net income.
Cash Flow Statement: The candidate should highlight that depreciation is a non-cash expense and should be added back to net income in the Cash Flow from Operations (CFO) section, increasing cash flow.
Balance Sheet: The candidate should mention that PPE decreases by $25k due to depreciation and cash increases by the tax shield amount, affecting both assets and equity.

Advanced Multi Step Scenario - Step 1

Tesla builds a $100 million battery production facility, fully financed with new debt.

At the start of Year 1, how are all three financial statements affected?

Show solution Hide solution

At this point, Tesla hasn’t earned or spent anything operationally. The company is simply investing in a new asset (the factory) and financing it with debt.

Income Statement:

No changes yet. Buying a factory is a capital investment, not an expense, so it does not show up on the Income Statement.
No depreciation or interest expense has been incurred yet.

Cash Flow Statement:

Investing Activities: –$100M due to capital expenditure for building the factory.
Financing Activities: +$100M from taking on new debt to fund the factory.
Cash Flow from Operations: No change yet.
Net change in cash = $0 → Money goes out to build the factory, but comes in from debt, so they cancel each other out.

Balance Sheet:

Assets: PPE (Property, Plant & Equipment) increases by $100M.
Liabilities: Debt increases by $100M.
Equity: No change yet (no income or retained earnings impact).
Both sides increase by $100M → The Balance Sheet stays balanced.

Note for Interviewer

The top three aspects to focus on are:

Accurate Treatment of the Income Statement: The candidate should explain that no immediate impact is seen on the Income Statement at the start since the purchase of the facility is a capital expenditure (CapEx) and doesn’t affect the expenses yet (only depreciation will in subsequent years).
Clear Explanation of the Cash Flow Statement: The candidate should mention that the Cash Flow from Investing section will show –$100 million for the CapEx (factory purchase), and the Cash Flow from Financing will show + $100 million for the new debt issuance.
Correct Reflection on the Balance Sheet: The candidate should explain that the Balance Sheet will show an increase in assets (under PPE) by $100 million and an equal increase in liabilities (under debt), with no immediate impact on equity.

Advanced Multi Step Scenario - Step 2

In Year 2, assume the debt is high-yield with no principal repayments and a 10% interest rate. The facility depreciates at 10% per year. What is the impact across the statements?

Show additional information Hide additional information

Show solution Hide solution

In Year 2, the facility’s depreciation and interest expense will affect Tesla’s financial statements, with changes to net income, cash flow, and asset values. The following breakdown will examine the impact on the Income Statement, Cash Flow Statement, and Balance Sheet in detail.

Effect on the Income Statement

The increase in depreciation reduces operating income, and the interest expense from the high-yield debt reduces pre-tax income, ultimately lowering net income.

Depreciation expense reduces operating income by $10M.
Interest expense reduces pre-tax income by another $10M.
Total pre-tax income drops by $20M.
At a 20% tax rate, taxes are reduced by $4M (a tax shield).
Net income falls by $16M.

Effect on the Cash Flow

The net income decreases due to the combined effects of depreciation and interest expense, but since depreciation is a non-cash expense, it will be added back to the cash flow from operations, leading to a net increase in cash flow.

Net Income = –$16M
Depreciation = +$10M (added back because it’s a non-cash expense)
Cash Flow from Operations = –$6M
No change in Investing or Financing activities in Year 2.
Net change in cash = –$6M

Effect on the Balance Sheet

PPE decreases due to the depreciation, and cash increases from the operating cash flow. At the same time, equity decreases as a result of the lower net income, ensuring the balance sheet stays in balance.

Assets:
- Cash = –$6M (from the Cash Flow Statement)
- PPE = –$10M (due to depreciation)
- Total Assets decrease by $16M
Liabilities: Debt remains unchanged (no repayment yet).
Equity: –$16M from the lower net income (affecting retained earnings).
Balance Sheet remains balanced.

Note for Interviewer

Let's take a look at what exactly is expected of the candidate:

Understanding of the Income Statement Impact: The candidate should explain how depreciation reduces operating income and interest expense reduces pre-tax income, ultimately leading to a decrease in net income. Calculations of the depreciation and interest effects on net income are expected.
Correct Treatment on the Cash Flow Statement: The candidate should highlight that depreciation is a non-cash expense and should be added back to net income in the Cash Flow from Operations, leading to a net increase in cash flow. The candidate should quantify the impact on cash flow due to depreciation adjustments.
Impact on the Balance Sheet: The candidate should explain how PPE decreases due to depreciation, cash increases due to operating cash flow, and equity decreases from lower net income. The candidate is expected to calculate the changes in these line items and ensure the balance sheet remains balanced.

Advanced Multi Step Scenario - Step 3

At the end of Year 2, the facility is damaged and written down to $0, and Tesla repays the entire loan in full. Walk through the impact on all three financial statements from the start to the end of Year 2 only.

Show additional information Hide additional information

Show solution Hide solution

At the end of Year 2, the facility is written down to $0 due to damage, and Tesla repays the full loan. This results in impacts across all three financial statements, including adjustments to the Income Statement, Cash Flow Statement, and Balance Sheet.

Effect on the Income Statement

Depreciation for Year 2 = $10M (as before)
Write-down of $80M = recorded as an expense, which lowers operating income
Interest expense = $10M (same as before)
Total Pre-Tax Income = –$100M
Taxes saved = $20M (20% of $100M)
Net Income = –$80M

Effect on the Cash Flow Statement

Net Income = –$80M
Add back depreciation = +$10M (non-cash)
Add back $80M write-down (also non-cash)
Cash Flow from Operations = +$10M
Cash Flow from Financing = –$100M (loan repayment)
Net change in cash = –$90M

Effect on the Balance Sheet

Assets:
- Cash = –$90M
- PPE = –$90M (from $10M depreciation + $80M write-down)
- Total Assets = –$180M
Liabilities:
- Debt = –$100M (repaid in full)
Equity:
- –$80M from net income
Liabilities + Equity = –$180M → Balance Sheet balances.

Note for Interviewer

Here, you can find the top three aspects to focus on in the answer of the candidate:

Income Statement Impact: The candidate should explain that the write-down reduces operating income, with no impact from the loan repayment. Correct calculations of impairment and its effect on net income are expected.
Cash Flow Statement Impact: The candidate should clarify that net income is reduced by the write-down, but the non-cash write-down is added back in CFO, and the loan repayment is reflected as a cash outflow in CFF. Correct calculations of the net impact on cash flow are expected.
Balance Sheet Impact: The candidate should explain that PPE is reduced to $0, cash decreases by the loan repayment, debt decreases by the loan amount, and equity is affected by the impairment and lower net income. Correct calculations of the changes to assets, liabilities, and equity are necessary.

Practice This Question Set With Peers Who Are Currently Looking for Interview Partners.

All Meeting Slots

Do you have questions on this question set?

Ask our community and receive answers and tips directly from our experts.

Related Finance Interview Basics Articles

Compound Annual Growth Rate

Key Figures & Terms

The Compound Annual Growth Rate (CAGR) describes the average annual growth of a metric such as revenue, market size, user base, or investment over several years. It assumes that profits are reinvested and compounded each year, resulting in a steady growth rate over the entire period.Also known as the Annualized Growth Rate or Geometric Average Growth Rate, the CAGR provides a simple way to show how a metric has developed over time without being distorted by short-term fluctuations.

To the article

Time Value

Key Figures & Terms

At first glance, the term Time Value might not seem all that meaningful, but the idea behind is actually quite simple.Time Value is the portion of an option’s price that reflects the possibility that the option’s value could change before it expires. It’s the difference between the option’s market price and its intrinsic value, and it exists because there’s still time for the underlying asset’s price to move.

To the article

Equity Value

Key Figures & Terms

The term Equity Value often comes up when talking about how companies are valued. But what exactly does it mean?At its core, Equity Value represents the total value of a company’s equity or in other words, how much the ownership in the company is worth from the perspective of the shareholders.For publicly traded companies, calculating Equity Value is straightforward: you simply multiply the current share price by the number of outstanding shares. For private companies, Equity Value is usually estimated through a business valuation process.In both cases, the key question is: How much is the company worth to its owners?

To the article

EBITDA

Key Figures & Terms

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It reflects a company’s earnings before taking into account interest payments, tax expenses, and non-cash items like depreciation and amortization. You can think of it as an extended version of EBIT that excludes all depreciation-related costs.The idea behind this: depreciation and amortization are non-cash expenses and often influenced by accounting methods, assumptions, or company policies. By stripping them out, EBITDA aims to provide a clearer picture of a company’s ongoing operational performance, regardless of how much has been invested or how assets are accounted for.

To the article

Typical Structure of a Finance Interview

General Info

Looking to break into the finance industry? Then you should be prepared for a demanding, multi-stage application process. Unlike in many other fields, the interview doesn’t come right after your CV is screened. Instead, you’ll often start with online assessments and other tests designed to evaluate your analytical thinking and numerical skills.Only after that comes the part that’s crucial in almost every recruitment process: the personal interview. There are usually several of them – either spread out across multiple rounds or bundled into what’s known as a Superday. On that day, you’ll go through multiple back-to-back interviews with employees from different teams or levels of seniority. In the end, these conversations are what determine whether or not you’ll receive an offer.In this article, we’ll take a closer look at how a typical finance interview is structured. You’ll learn which skills matter most, why this format is so widely used, and how you can best prepare for it.

To the article

Finance Interview Questions – Prepare for Your Finance Interview Like a Pro

Practice with our curated Finance Interview Question Sets and get ready for your upcoming interview in Corporate Finance, Investment Banking, or Private Equity.
Whether you are applying to an investment bank, a Big Four firm, or a corporate finance department, these questions will help you build confidence and master your finance interview skills.

A comprehensive selection of Finance Questions
Our collection covers the key areas of typical finance interviews – from Accounting, Financial Modelling, and Valuation to M&A transactions, Capital Markets, and Corporate Strategy.
The sets vary in difficulty, allowing you to train both fundamental and advanced concepts.
Many of the questions are based on real interview experiences from top firms such as Goldman Sachs, J.P. Morgan, Deloitte and PwC, giving you authentic insights into what to expect.

Practice alone or team up with other candidates, compare your answers, and refine your problem-solving approach.
Get fully prepared for your next Finance Interview with PrepLounge!